January 3: New Year, Old Problems

2011, The Year Washington Lost (HuffPo)
While most Americans are returning to work, the members of Congress are still on vacation. As Zach Carter notes, they sort of earned it -- it takes a lot of effort to get so much wrong.

For 2012, Signs Point to Tepid Consumer Spending (NYT)
Weak consumer demand has been our central economic problem for the last few years, and it looks like in lieu of any real effort to address that problem, the power of magical thinking will not suffice to create a recovery.

Happy Days Are Here Again! (Slate)
Matthew Yglesias has a more optimistic take on the year ahead, arguing that conditions are right for a period of sustained growth building on a strong fourth quarter in 2011... as long as inflation hawks don't start setting Fed policy. Damn.

Austerity Reigns Over Euro Zone as Crisis Deepens (NYT)
At least Americans have the comfort of knowing they're not (yet) as miserable as the citizens of Europe, where the implementation of austerity measures has leaders debating whether they'd like their upcoming recession grande or venti.

Nobody Understands Debt (NYT)
Paul Krugman explains that analogizing the national debt to a home mortgage might make for great "won't someone think of the children?!" arguments, but it's also very misleading and confuses policymakers who are confused enough as it is.

Voting rights, super PACs and the media cloud the election (WaPo)
It's officially election season, which means there's one question on everyone's minds: Who's gonna win? Katrina vanden Heuvel writes that rich conservatives are the early favorites if voters don't recognize how the choice is being taken out of their hands.

Why Ron Paul Challenges Liberals (Naked Capitalism)
Roosevelt Institute Fellow Matt Stoller argues that while Paul's racist newsletters are fair game for liberal critics, what really makes them angry is that they have no answer to his critique of the links between big government, big finance, and big war.

America's Financial Leviathan (Project Syndicate)
Brad DeLong notes that America's finance and insurance industry has been growing by leaps and bounds as a share of GDP since the 1950s, but while it's churning more and more money, there's little evidence that it's been producing anything of value.

Cantorland (TNR)
Timothy Noah explains why the GOP's vision of Ronaldus Magnus, who always cut taxes and knew compromise was for wimps, doesn't quite line up with the reality of Ronald Reagan, who slashed taxes mostly for the rich and approved 11 tax increases.

The biggest driver of income inequality: capital gains (WaPo)
The Congressional Research Service finds that rising inequality has been driven by growth in income from capital gains, which are taxed at a lower rate under the bizarro-logic that people should keep more of what they've done less to earn.